The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Stutter-Step Whack-A-Mole

08/26/2020

Shutting down the economy is a terrible thing.  It hurts the economy, as well as the emotional health of our citizens.  Recognizing this, President Trump nonetheless had the courage to shut us down anyway.  However, he remained under enormous pressure to get America open and back-to-normal as quickly as possible.

The only thing worse than shutting down the economy is releasing it prematurely, possibly forcing another shutdown.  I feel sorry for parents forced to decide whether to send their kids back into schools with only a prayer that it will be safe.  I feel sorry for college students being sent home from college because it is not safe.  Should they return whenever some old, white guy summons them to back to campus?  Or, should they Hurry-Up and Wait?  Or, shall we just stutter-step?

There are legitimate arguments that we should resume life as before — but aggressively and quickly attack any flare-ups of Covid, like the Whack-A-Mole game.  With proper testing and contact tracing, that strategy would probably offer enough protection . . . but we have neither.

When we lifted the shutdown, both investor sentiment and consumer confidence soared.  Today, investor sentiment is still soaring – even “euphoric” – while consumer confidence has fallen for two straight months and is now at a six-year low.  This bifurcation in our national attitude reflects the bifurcation in society caused by the pandemic.  For those of us with steady incomes and portfolios, there is no reason not to euphoric.  Our net worth has actually improved during the pandemic.  For those less fortunate, there is no reason they should not lose confidence.  The future is bleak for them!

Over the last 30 years or so, wealth has become increasingly concentrated in the hands of the upper class.  Even hard-right Republicans agree this is a serious and growing cancer on our body-politic.  However, with this pandemic, it is not just a case of the rich-getting-richer.  A bigger problem is the less-fortunate-getting-even-less-fortunate!  The coronavirus discriminates . . . against the less fortunate!

In the long run (over 12-18 months), both the stock market and the economy will be fine.  In the short run, I can feel as guilty as I like?

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